Home/Economy/ Tesla directors: 'No formal proposal' to take company private

Tesla directors: 'No formal proposal' to take company private

Cory Rios |Tuesday, August 14, 2018

Tesla looking to go private with backing of Saudi fund

Tesla founder Elon Musk has confirmed that he is closely working withGoldman Sachs and private-equity firm Silver Lake to take the electric carmaker private - a deal that would need almost $70 billion in funding.

Mr Musk's tweet earlier this month had said "funding secured", raising questions about where the financing for any deal might come from. It also has hired an independent legal counsel and will engage a financial adviser.

"I'm excited to work with Silver Lake and Goldman Sachs", Musk tweeted on Monday.

Tesla's board disclosed on August 8 that Musk had held talks with the directors in the previous week on taking the company private. Tesla shares ended trading on Monday at $356.41.

Musk disputes the buyout amount, saying in today's statement that "reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed". "This is why I referred to "funding secured" in the August 7th announcement".

Saudi Arabia's Public Investment Fund (PIF) is known for its technology investments, including the $45bn it has spent in SoftBank Group Corp's Vision Fund.

He said that since his Twitter posts on the possibility of a deal the managing director of the Saudi fund had expressed support for proceeding subject to financial and other due diligence.

PIF officials have said in the past that decisions at the sovereign wealth fund are made with care, emphasizing corporate governance.

Musk said he will "continue to talk with investors" as he looks into taking the automaker private.

While Musk used Monday's blog post as a way to show the tweets were part of an effort to be completely transparent with shareholders about wanting Tesla to be a private company, sources told the paper it was impulsive and was driven by feelings of anger for the auto maker's critics.

A Tesla electric vehicle supercharger station is seen in Los Angeles, California, U.S. August 2, 2018. With little commentary about the financing after that, it prompted uproar including two class action lawsuits and a potential Securities and Exchange Commission inquiry.

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